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NHS: Can this patient survive?

This month saw a blast of more bad news about our beloved health service. Too few nurses, too many doctors, no money, operations cancelled, another radiotherapy scandal, staff threatened with redundancy and entire hospitals going bust or being bailed out.

Many people must be wondering where all the taxpayers' money poured into the service has gone. After all, if you increased the budget of any commercial organisation from £34bn to £84bn a year you would expect to see dramatic improvements. But car parking is impossible, the loos are still dirty and patients sit around clutching pieces of paper in an age where you can travel the world with an invisible electronic ticket.

I have worked in the NHS for 34 years, so it comes as no surprise to me. It's a large monopoly provider employing 1.4 million people that sometimes seems more responsive to staff needs than to those of its customers. Buffeted by the winds of political and social change, assaulted by a barrage of new expensive technologies, faced with consumers who are far more demanding than their parents, it is now struggling for survival.

And in 2008, current increases in NHS funding of 7 per cent a year dry up. So what is the solution?

It has to be reform. Not tinkering at the edges but pushing quickly forward with the bold plans already in place. Increased pluralism with new players providing innovative services will lead to real competition and a market-driven approach.

Novel ways of working will result in greater efficiency, better motivation and allow staff to work together to drive innovation rather than whinge about the lack of it. The key is to get the multiplicity of professionals working together in the best way for patients. This will need close but not intrusive management.

We have nothing to fear from the further implementation of payment by results (PBR) - which simply means paying hospitals and GPs for what they actually do. It is exactly what happens in any other service industry. Imagine a supermarket getting paid the same wad of money each week regardless of how much it sold. PBR turns patients from service users into welcome customers.

Consider high-street opticians. The old lady with her shopping trolley living on a state pension is as welcome as the girl about town in Prada and pearls who wants Gucci frames. Both come out seeing better. Can we not apply the same model to cancer care and hearing aids?

The trouble is, as the think-tank Reform recently pointed out, the whole process of change is slowing down just as it needs to accelerate. Waiting times in some areas have actually risen and novel rationing systems have emerged.

There was an outcry from both left and right when a Department of Health report on workforce numbers was leaked. But these were probably only the back of an envelope doodles by civil servants, rather than a serious assessment of demand, technology improvement, patient preference and skill mix.

The real issue is that by 2008 we have to have moved from central to devolved planning. Local, not central, management should by then be deciding what staff to hire, what they should be doing, how many of what grade are needed and how much to pay them, just as in high-street shops. Real incentives for productivity, completely omitted in the recent, very costly, doctors' pay award, are vital in a pluralistic marketplace.

Stripping away bureaucracy to reduce costs is an essential component of therapy for the NHS. One report suggests that we are heading for a £7bn deficit in the NHS by 2010 and that is not allowing for changes in technology. That represents a 2p in the pound increase in income tax for everybody unless we can make things more efficient.

Major new investment capital is available from City institutions subject to robust business plans. The usual emotional statements of need or woolly wish-lists simply won't do. Doctors hold the key.

They can carry the other health professionals by providing decisive leadership. Achieving good rapport between local medical leaders and managers is vital, as is delivering services to patients in convenient settings rather than city-centre teaching hospitals, while retaining access to technological advances.

The NHS staff that I have known over many decades have the talent, skills and education to make this transition. Whether it is dealing with a child with leukaemia, a coach crash on the M25, or managing an elderly man with cardiac failure, NHS people can do it as well as the best in the world.

But only by intensifying the current reform programme will the NHS ever be got out of intensive care and sufficiently revived to make the long transition to a consumer-driven marketplace of health. Whatever our political persuasions, we must all surely agree that a speedy recovery is in everyone's interests.

Karol Sikora is a former director of cancer services at Hammersmith Hospital. He is now medical director of CancerPartnersUK, an independent sector provider which is working with the NHS to create the largest integrated cancer treatment system in Britain. He is on the advisory board of the independent think-tank Reform